The competition was launched into the Serbian electricity sector by adoption of the Energy Law with a view to enhancing the efficiency of the sector through application of market mechanism forces to the electricity production and supply area, maintaining, however, the economic regulation of electricity transmission and distribution activities as natural monopolies.

On the day the Energy Law took effect in 2004, all electricity consumers became tariff customers who, in compliance with the law, receive electricity from the trader established to supply tariff customers within PE “Electric Utility of Serbia” at regulated prices.
At the same time the opportunity was given to customers meeting eligibility criteria specified in the Law, to acquire the status of an eligible customer and thus enabling them to purchase electricity on the free market.

In the first phase, starting from the day when the Energy Law became effective, the electricity market was potentially open for all customers with an annual electricity consumption of greater than 25GWh.

As of January 1, 2007, in accordance with the decision of the Council of the Energy Agency of the Republic of Serbia, the right to acquire the status of an eligible customer may be exercised by any electricity customers with an annual consumption greater than 3 GWh. Thus, 21% of the electricity market has been potentially open (for about 350 customers).

The right to acquire the status of an eligible customer has been given to all customers as of February 2008, in line with the decision of the Council of the Serbian Energy Agency, except to households which have an annual consumption of less than 200.000 kWh. Thus, 47% of the electricity market has been potentially open.

Gradual opening of the Serbian electricity market will continue until the market is fully opened as in line with the ratification of the Energy Community Treaty binding Serbia to open the market also for households until January 1, 2015.